We told you about Coalition’s findings on business email compromise (BEC), as reported in the managing general agent’s 2024 Cyber Claims Report. But we were also struck by the data on Fund Transfer Fraud or FTF.
Both the frequency and severity of FTF claims increased from 2023 to 2024. Claims were up 15% YOY and their “initial severity” jumped 24% to an average loss of over $278,000.
“(W)e have good reason to specify ‘initial severity’ for FTF claims: When a policyholder calls us about a possible FTF loss, we don’t just initiate the coverage process and provide the policyholder with a Proof of Loss form. Our claims team snaps into action and does everything within their power to put stolen funds back in policyholders’ pockets,” writes Robert Jones, the company’s head of global claims. The company reports it worked with government and financial organizations to “claw back” more than $38 million in fraudulent transfers in 2023, with an average recovery of $470,000.
Reduce Risk
How to reduce your risk of an FTF attack? Among other steps: Improve your email security and institute processes to verify fund transfer requests. This includes inoculating your employees against deep fakes to avoid scams such as one that used AI to impersonate bosses on a video call and trick a staffer into wiring $26 million to an illegitimate account earlier this year.
The increasing trends in Fund Transfer Fraud (FTF), as noted in Coalition’s 2024 Cyber Claims Report, serve as a stark reminder of the evolving complexities in cybersecurity. Businesses must not only advance their technical defenses but also cultivate a vigilant and informed workforce to counteract these sophisticated threats. The substantial recoveries made through proactive interventions highlight the potential for resilience and recovery, underscoring the importance of strategic collaborations and robust security measures in navigating the digital age.
Get the Coalition report here.
Other News: Email Fraud Dominates Cyber Claims in 2023: Coalition Report(Opens in a new browser tab)
